Restoring equity in education

Posted 4/17/12

Americans like to think of the United States as a land of opportunity. Everybody, regardless of birth or circumstance, ought to have an equal chance to make a good life for themselves. The record …

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Restoring equity in education

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Americans like to think of the United States as a land of opportunity. Everybody, regardless of birth or circumstance, ought to have an equal chance to make a good life for themselves. The record inequality of wealth and income that now exists in this country, however, suggests that this is not currently the case. And while a number of factors are responsible, our increasing failure to deliver equal access to a quality education is an important piece of the puzzle. One reason for that failure lies in the fact that we finance our public schools largely with property taxes. That needs to change.

If education relies on property taxes, then wealthy areas with valuable properties and residents who can afford tax increases without cutting into daily living expenses will be able to provide better educations than poor rural areas like ours. True, state aid helps offset the difference. But when states tighten their budget belts as is now the case, that offset tends to dwindle. And in New York State, the property tax cap that has just been imposed will make the difference between richer and poorer school districts progressively greater over the years.

Dr. Ken Hilton, superintendent of the Sullivan West School District, explained why that’s so in a presentation at the April 5 school board meeting. Here’s how the math works, using slightly different numbers than Hilton did for simplicity’s sake.

Though it’s generally referred to as a 2% tax levy, determining each district’s levy cap is far more complicated than that. But, for the example, let’s assume a tax levy of 2%. Now say there are two districts, a poor rural district and a rich one (we’ll borrow Hilton’s moniker, “Fancy Pants Central School District”), each starting with an annual budget of $20 million. The rural district gets 50% of its funding from state aid, so its tax levy is $10 million. In a single year, it can increase that $10 million by 2%, or $200,000. Meanwhile, Fancy Pants doesn’t need much state aid, and so finances 80%, or $16 million of its budget, with property taxes. When it increases its tax levy by 2%, that means a rise of $320,000, compared to the rural district’s $200,000. The new law says the cap can be exceeded with a 60% or higher “yes” budget vote—something you’re more likely to see in the affluent Fancy Pants district, making the gap even bigger.

Now imagine that effect compounded over a series of years. The difference between the funding—and the educational opportunities—is not only going to get wider and wider, but it will do so at an accelerating rate.

Note that though the tax cap makes things worse, it does not create the problem of inequitable funding, only exacerbates it. Moreover, the problem that the tax cap addresses—that people, especially on fixed incomes, are being forced out of their houses by skyrocketing property taxes—is equally real, and also hits the disadvantaged disproportionately hard.

A strategy that could address both problems is simply to stop using property taxes to fund education and start using income tax. Imposed statewide, this would broaden the overall tax base used for education; distributed equitably, it would help ensure that all children in New York had equal opportunities to learn and excel.

This idea is one that has been around for a while now, and is a very tough political sell: as unpopular as property taxes are, income taxes are probably even more so. But the money has to come from somewhere, and income tax looks like a fairer source, and one with a much better chance of delivering that all-American goal, equality of opportunity.

And hard sell or not, some of our elected representatives are out there pushing for just this idea. In New York, Assemblyman Kevin Cahill has authored a bill called the Equity in Education Act (A.447), which would phase out property taxes and phase in income taxes as a means of funding education over a five-year period. And in Pennsylvania, Republican state representative Jim Cox has just introduced the Property Tax Independence Act, which would replace school property tax revenue by an increase in the state’s personal income tax from 3.07% to 4% and raising the sales tax from 6% to 7%.

A.447 has been locked up in committee since 2006; it remains to be seen whether the Pennsylvania bill makes any progress. But maybe it’s time for the electorate to get out and push. At the very least, if we can get these bills onto the floors of their respective houses, we might get a serious conversation going on some workable alternatives to our increasingly untenable system. If you agree, consider calling your state representatives and giving them a nudge.

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